3D Systems Wins Suit With DSM Regarding RFID Materials Lockout Device

The District Court for the Northern District of Illinois has come out in favor of 3D Systems in an antitrust case brought against the 3D printing company by chemical giant DSM Desotech, a developer of ultraviolet curable fiber optic materials.

DSM Desotech has research and manufacturing facilities in the United States, Europe, China, and Japan and is headquartered in Elgin, Illinois.

DSM Desotech had alleged anticompetitive behavior with respect to 3D Systems integrated printing systems and materials set, but the Federal Circuit agreed with the District Court that there was insufficient evidence of that behavior on the part of 3DS.

"Our integrated printing systems and materials provide significant customer benefits," said Avi Reichental, President and CEO of 3D Systems. "We are pleased with this decision confirming that DSM Desotech's allegations were meritless."

The DSM v. 3D Systems ruling essentially stated that stereolithography does not constitute an actual market because alternative 3D printing technologies are available. It's a bit strange, but the ruling asserts that all 3D printer technologies are, in effect, interchangeable.

For its part, the district court held that "Desotech failed to show that SL machines constitute a distinct market, finding it undisputed that alternatives for SL exist. In reaching its decision, the court found first that Desotech's internal documents showed that SL competes with other technologies. Second, the court found that a DOJ report deemed SL to be in the same market as other rapid-prototyping technologies. Third, the court found that, while five customers testified that certain technologies were not substitutes for SL, another five testified that some technologies are indeed substitutes."

The decision stated that 3D Systems' deployment of RFID tagging was aimed at providing "customers with useful functionality" and added that there is "...no evidence that 3D Systems was limiting resin variety, or charging supracompetitive prices, for SL resin."

DSM manufactures a range of photosensitive polymers – called the DSM Somos line – which are suitable for use in the stereolithography technology used by 3D Systems. DSM claimed that its customer base for 3D printing resins took a major hit when 3D Systems applied RFID tags to its 3D printers designed to communicate with a transmitter on the cap of a resin material bottle. The technology used by 3D Systems effectively shuts their devices when a non-3D Systems resin is detected.

According to the suit filed by DSM, the practice constituted anti-competitive behavior. The company was acting to ensure free competition in the market and asked that the RFID identification should be prohibited.

In a similar suit filed last year, the European Commission ruled that inkjet printer manufacturers like HP, Lexmark, Canon and Epson weren't engaging in an anti-competitive fashion in requiring customers to use their branded ink supplies.

While the court ruling will allow the practice of locking out materials suppliers to continue, it's likely that developers and end users will also discover work-arounds to bypass the RFID system.

Desotech and 3D Systems had at one point entered into negotiations for the approval of additional Desotech resins, but after those negotiations broke down, Desotech filed suit.

In order to prove its attempted monopolization claim, Desotech was required to show that "specific intent to achieve monopoly power in a relevant market; (2) predatory or anticompetitive conduct directed to accomplishing this purpose; and (3) a dangerous probability that the attempt at monopolization [would] succeed."

A Desotech expert testified that, "I don't think there is actually really any material dispute that there are some technologies, which for certain uses, are an alternative to stereolithography."